Foxconn Reaches Out To Other Partners As Vedanta JV Starts Facing Hurdles: Report

The two companies formed a JV in September 2022 where Vedanta has a 67 per cent stake, to set up a semiconductor fab at Dholera in Gujarat

The Centre is concerned about Vedanta Group's "financial stability" and has suggested that Foxconn on board a different partner, according to the report.

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Foxconn, contract manufacturing company, has started reaching out to some major business houses in India in a bid to find a new partner for its semiconductor business, according to a report by The Economic Times (ET). The development comes at a time when the Taiwanese company's joint venture (JV) with Anil Agarwal's Vedanta Group has been facing several hurdles.

The two companies formed a JV in September 2022 where Vedanta has a 67 per cent stake, to set up a semiconductor fab at Dholera in Gujarat.

A government official cited the ET report as saying that the Centre is concerned about Vedanta Group's "financial stability" and has suggested that Foxconn on board a different partner. Foxconn, after this, held informal discussions with a few companies to explore a potential partnership. This includes "two large domestic corporate groups". The names of these companies, however, were not mentioned in the report.

Vedanta Resources Ltd recently raised $450 million from two companies, Trafigura ($200 million) and Glencore ($250 million), to repay its debt via pledging of equity. Both of these companies are VRL's rivals.

The ET report quoted experts as saying that this highlights the dire financial situation of the company.

Earlier, the government is set to deny crucial funding for Anil Agarwal’s chip venture, a setback for a $19 billion push to make semiconductors in the country, as reported by news agency Bloomberg. Quoting sources privy to the development, Bloomberg said the Centre is likely to tell the venture between Agarwal’s Vedanta Resources Ltd. and Taiwan’s Hon Hai Precision Industry it won’t get incentives to make 28-nanometer chips. The venture has applied for such assistance, potentially worth billions of dollars, but hasn’t met the criteria set by the government.

Foxconn and Vedanta also reportedly have differences over the changes to be made in their applications to reapply for incentives under the India Semiconductor Mission (ISM). The JV applied for incentives under ISM in early 2022, but the Centre has not yet approved it.

The Centre has also opened another round of applications earlier this month.

According to reports, the Centre had asked Vedanta-Foxconn to take a technology partner with licence-grade semiconductor technology. Moreover, it had also asked Foxconn to take the lead in the JV.

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